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Bill Gates Backs Nimbus, Betting on Computer-Based Drug Discovery

Here’s a startup that is stepping out of top-secret status in style. Microsoft Chairman Bill Gates, the second-most wealthy person in the world, is one of two new seed investors in the stealthy biotech startup, Nimbus Discovery.

Cambridge, MA-based Nimbus, focused on computer-based drug discovery in partnership with the global chemical-simulation software provider Schrödinger, said today that it has expanded its seed round with investments from Gates and Richard Friesner, a professor of chemistry at Columbia University and a co-founder of Schrödinger. The seed round also includes founding investor Atlas Venture. Nimbus didn’t disclose how much it has raised from its backers.

Atlas formed Nimbus in spring 2009 with Schrödinger, which specializes in computational chemistry and drug design for the biopharmaceutical industry. (Schrödinger has offices in New York, Cambridge, San Diego, Portland, OR, and other locations around the world.) Gates learned about Nimbus through the folks at Schrödinger, according to Atlas partner Bruce Booth, a co-founder and chairman of Nimbus. Schrödinger got a $10 million equity investment in spring 2010 from Gates‘ investment and holding company, Cascade Investment.

Though he’s best known as a software magnate, Gates has a lot of experience in healthcare too. The Bill & Melinda Gates Foundation is a major supporter of global health and educational efforts. And Gates was a major investor and board member of the Bothell, WA-based biotech firm Icos, which developed the erectile dysfunction drug tadalafil (Cialis) and was acquired by Eli Lilly (NYSE:LLY) for $2.1 billion in 2007. Early this week, my colleague Luke Timmerman also reported the Gates Foundation put together its first direct equity investment in a biotech company, through a $10 million financing of Research Triangle Park, NC-based Liquidia Technologies.

Fittingly, Nimbus straddles the worlds of software and biotech with its computer-aided method of drug discovery. The startup has a strategic partnership with Schrödinger that gives the biotech access to Schrödinger’s tools that help scientists understand the mechanics of how drugs bind to certain disease targets. Schrödinger’s technology also enables the company to design drugs against those targets. Later, the drugs can be formulated into actual chemical compounds and tested in laboratory experiments to confirm insights from the software, explained Jonathan Montagu, the vice president of business operations at Nimbus.